Singapore's Lee Leaves Startup Legacy

The March 23 death of Lee Kuan Yew, the founding father of 5.4 million resident, 277 million square mile Singapore, made me think of the city-state's strides to encourage more startups. While startups founded by Singapore natives do not predominate, foreign-born entrepreneurs have used it as a place to start their ventures.

A case in point is Fastacash -- a service that lets "consumers transfer any kind of value (money, airtime, coupons, etc.) across any social network or messaging platform of choice."

Before getting into Lee's startup legacy, let's look at his amazing accomplishments. Lee earned a law degree at Cambridge University and took what had been an appendage that was expelled from Malaysia in 1965 with no natural resources and turned it into one of the world's most prosperous countries.

To me it looks like a benevolent dictatorship with only one political party. Lee got rid of corruption by paying very high salaries to its political leaders. He created an economy based on attracting western corporate headquarters, shipping, and oil refining.

And he created a university system that produces a well-educated population that wants to own a nice condo, belong to a tony country club, and spend their cash in high-end retail outlets that permeate Singapore most prominently throughout Orchard Street.

Over the last four years, I have noticed that Singapore has become less hospitable to foreigners because the popular vote for Singapore's People's Action Party dropped to a mere 60% in 2011 -- natives are not thrilled by the rising real estate prices and they feared the incursion of foreigners who might take the best jobs.

Singapore seems to have a softer spot for entrepreneurs who might create jobs there. As I have seen in my January visits there starting in 2012, Singapore makes it easy to start companies but getting sufficient capital and hiring and motivating talented workers remains difficult given that Singapore's culture places a high value on making sure its students get high-paying jobs, live in beautiful condos, and avoid career-killing failure.

That has not stopped foreigners like Vince Tallent, a native of the UK. Tallent held senior executive positions with payments company, Ingenico, before he joined Fastacash cofounders Shankar Narayanan and Michael Wee in 2012.

Tallent is not only Chairman and CEO of Fastacash, he is also a Limited Partner in a Singapore based technology venture capital firm, Jungle Ventures, and an Operating Partner at SBI Venture Capital ICT Fund.

Tallent joined Fastacash because he saw the potential of the technology and its underlying idea – of enabling consumers to transfer value across social networks.

The idea grew out of needing a simple way to send money. "Our co-founder’s daughter was always asking him for his credit card. At the same time, he noticed his daughter spent a lot of time on her mobile, across the different social and messaging platforms. He too was using these networks for keeping in touch with his friends and family. This got him thinking. How could he combine social and payments?," explained Tallent.

Fastacash is targeting a huge market. According to the WorldBank the international remittance market will reach $685 billion in 2015.

Lots of people are using smartphones on social networks as well. Around the world, seven billion mobile subscriptions with 1.75 billion smart phone users and 3.1 billion people accessing the Internet -- many via those smartphones.

Social networks and messaging are also posting big numbers. Facebook has 1.36 billion users, WhatsApp and Facebook Messenger have 600 million and 500 million consumers respectively.

And people spend an average of a couple of hours each day on these channels, with many people checking their social channels, more often and before, checking their email or news channels.

Though services like Venmo are popular, the options for payments are more limited.

Fastacash believes it can win through its unique positioning -- it offers a so-called white label technology service that lets its partners provide the service to consumers while retaining their branding.

As Tallent explained, "We will win in this space through our differentiated positioning – and that is to partner with any of the players within the industry - whether incumbent or emerging."

Fastacash has global partners in many payment industry segments. Noted Tallent, "As a technology partner, we work with industry players from multiple sectors and geographies – be it banks, mobile operators, remittance companies, payment service providers, mobile wallet services and other financial institutions."

SINGAPORE - MARCH 23: A man mourns the passing of former Prime Minister Lee Kuan Yew outside the Singapore General Hospital on March 23, 2015 in Singapore. Former Prime Minister, Lee Kuan Yew, 91, died last night at Singapore General Hospital after spending several weeks in critical condition after being admitted for pnemonia on February 5. Lee Kuan Yew served as the first Prime Minister of Singapore when it gained rule from Britain in 1959 and until he stepped down in 1990. (Photo by Suhaimi Abdullah/Getty Images)

Fastacash delivers a service to consumers without swiping a partner's customer relationships. Noted Tallent, "For example, a consumer in India would download the Oxigen Wallet app, but mostly all of the apps are co-branded – similar to an
Intel Inside approach. We build and implement the marketing plans jointly with our partners."

Tallent declined to provide revenue statistics and but its employee count suggests it has far to go before it becomes a big player. As Tallent said, "We are currently at a team strength of 39 employees. We are live in five markets – India, Singapore, Vietnam, Indonesia and Russia where the uptake has been encouraging."

Fastcash has cobbled together financing from various regional sources. It has raised a total of $8.5 million -- $1.5 million in a seed round in December 2012 from "private investors and Hong Kong-based investment fund, Funding the Future."

In March 2014, it raised $7 million from Jungle Ventures, Spring SEEDS Capital, Golden Oriole Investments, Funding the Future, Jagdish Chanrai (Principal of the Kewalram Chanrai Group) and existing investors.

Fastacash has a long way to go before it can return money to its investors. It is currently raising a Series B round as it seeks to grow by building "a strong presence in the key “send” markets like the U.S. which is the source of value and the big “receive” markets like Indonesia with big populations of people who receive the cash.

If Fastacash succeeds, it will be due in part to Lee's efforts to attract entrepreneurs like Tallent.